What Do Rob Lowe And DirecTV Teach Us About False Advertising?

Lots of publicity has come to DirecTV for its annoying, bizarre, hilarious or highly effective (you choose) television ads. Rob Lowe and his evil twins, alternating between those super-creepy, painfully awkward, or far less attractive versions of the actor, touted the benefits of cool DirecTV, compared with what the ads portray as awkward or creepy cable. Nothing unlawful about that.

Probably most of us took for granted DirecTV’s claims that its service delivers better picture and sound quality than cable, more sports programming than its rivals, and shorter customer service wait times than cable operators. It also said it was rated No. 1 in customer satisfaction. It turns out these claims could not be substantiated. Who knew? Well, Comcast, among others.

A charge was filed by Comcast against DirecTV at the National Advertising Division of the Better Business Bureau (known as the NAD), claiming that the ads, and particularly the outrageous alter-ego characters, were so “outlandish and exaggerated” that consumers would not expect them to be literally true. The NAD said it was not against humor, but disagreed that context in these ads made clear that the claims were not intended to be taken seriously.

Comcast did not like being lumped into the “loser” cable image. It could have run to the federal courthouse with hair-on-fire urgency. Why did it opt for the NAD? While many companies want to sue first and ask questions later, many significant advertising claims are decided on a voluntary basis – a non-binding voluntary basis. Both sides make their claims and submit their evidence in the form of ad substantiation. Some advertising experts are left to decide. This is not like calling the BBB at their the toll free number to complain about a dry cleaner losing your shirts (again). This is a corporate process. The filing fee can be from $10,000 to $25,000 dollars. (A federal lawsuit is a bargain to file at $400.) But legal fees connected with a lawsuit will be expensive for taking a claim like this to trial in federal court (it can easily be a seven-figure expedition through the judicial process). The legal fees to prepare and file an action in the NAD are greatly limited and vastly less costly than court.

The NAD also supplies the major benefit of getting to a decision in a few months. Even then, an ad could have run its course by the time a decision is made. In a court action, you can be pretty sure the offending ad is a moot point by the time a trial is scheduled 24 months down the road. DirecTV says that it was going to drop its ad campaign anyway – it had moved on to a new campaign.

If a company disagrees with the NAD, it is not compelled to drop its ad. The NAD has no power to fine the parties and its process does not require them to promise to be bound by their decision. As a practical matter, companies are reluctant to go to federal court and defend an ad that the experts at the NAD have found to be unsubstantiated.

It is a bit hard to imagine that DirecTV had already exhausted this campaign, given the time and money invested in running and producing these ads, with a high-profile celebrity. It says it does not accept the decision of the NAD and is going to appeal to the National Advertising Review Board.

Aaron Burr is often quoted as having said that the law is that which is boldly asserted and plausibly argued. There’s a lot to that. But truth in advertising must be more than boldly asserted if it’s going to get past the NAD. Maybe if DirecTV really does pursue this further, it can make a convincing claim that its ads were not inaccurate. But once you agree to participate in a voluntary process like this one, you have to more or less be willing to abide its decision, and based upon DirecTV’s statement that it was done with the Rob Lowe advertisements, you have to believe they went into this NAD process with their eyes open. If the parties were in federal court, no one would be talking about this for months or even years to come. In fact, eventually it would have been a moot point and the parties would have settled quietly because the campaign would have outlived its usefulness.

Sometimes, if an ad campaign is so threatening, the only apparent remedy is to go to court and seek an immediate injunction.

These kinds of false adverting claims can be difficult to define exactly, but they are of great interest to consumers – in part because consumers are well-informed spectators in the dispute. Because of the visibility which comes from the clearly enormous advertising budget dedicated to this campaign, the NAD itself, and its role in resolving claims, has gotten some publicity here too.